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Monday, May 14, 2012

Scotland's new Minimum Alcohol Pricing

The Scottish Government has today announced a minimum price of 50p per unit for alcoholic drinks.

First minister Nicol Sturgeon said:

"Too many Scots are drinking themselves to death. The problem affects people of all walks of life [so we might as well tax them now while they can pay up]."

OK I admit I added the last bit of that, but it seems to be a sub text given that research shows that there is little evidence that a price of 50p will make much of a difference. The research that this figure is based on came largely from British Columbia Canada which has traditionally had a much more restricted alcohol market.

"The study by Professor Tim Stockwell who is director of the Centre for Addictions Research of British Columbia, found that a 10 per cent increase in the minimum price of all alcoholic drinks led to a 3.4 per cent reduction in consumption." (source: Newsnet Scotland).

The provincial government in British Columbia controls the distribution of alcohol tightly, operating most sales outlets themselves under the brand "BC Liquor Stores". There is considerable "contraband" of alcohol across the border from other provinces and Indian Band reservations (where alcohol is exempt from GST - VAT).

Scotland's distance from the channel ports has meant that large scale illegal shipping of alcohol from France has been limited. It will be interesting to see if this sort of smuggling becomes more viable with higher prices or if people will turn to home brewing to save money.